Frandsen v. Jensen-Sundquist Agency, Inc.
United States Court of Appeals for the Seventh Circuit
802 F.2d 941 (7th Cir. 1986)
Jensen-Sundquist Agency, Inc. (Jensen-Sundquist) (defendant) was a holding company whose principal asset was the First Bank of Grantsburg (First Bank). Members of Walter Jensen’s family (majority bloc) owned 52 percent of Jensen-Sundquist and Dennis Frandsen (plaintiff) owned eight percent. The parties entered into a stockholder agreement that provided that if the majority bloc offered to sell its shares to anyone, it must first give Frandsen a right to buy the shares at the same price. The majority bloc entered into negotiations with the First Wisconsin Corporation (First Wisconsin) for the sale of the First Bank. They reached an agreement to merge the First Bank into First Wisconsin and the majority bloc asked Frandsen to sign a waiver of any right he “may have” in regards to the transaction. Frandsen refused to sign and purported to invoke his right of first refusal, offering to buy the majority bloc’s shares in Jensen-Sundquist. The majority bloc refused to sell its shares to Frandsen and went ahead with the merger. Frandsen brought suit, alleging a breach of the stockholder agreement. The district court granted summary judgment to Jensen-Sundquist. Frandsen appealed.
Rule of Law
Holding and Reasoning (Posner, J.)